Global bond sell-off piles new pressure on UK borrowing costs before budget

A global sell-off in government bonds has pushed the yield on 10-year UK gilts to 5.38% by Thursday morning, near last week’s 19-year high, ahead of John Healey’s budget next month. Analysts say recent rises have erased more than half of the £24bn headroom Rachel Reeves had against Labour’s fiscal rules in March; Healey is expected to keep a much smaller buffer, while Treasury sources say the budget will stay focused and defer major spending to a review next year.